Palm stock plummets after poor sales force company to lower guidance

Palm's stock tumbled more than 19 percent Thursday after the handset maker decreased its forecast for third-quarter sales dramatically, citing lower-than-expected demand for its smartphones.

Palm said it expects its sales to be between $285 million and $310 million, well below its previous forecast of $1.6 billion to $1.8 billion. Palm chief Jon Rubinstein said that "broad consumer adoption of Palm products is taking longer" than he and his company had anticipated.

"Our carrier partners remain committed, and we are working closely with them to increase awareness and drive sales of our differentiated Palm products," he said.

According to Forbes, analysts had on average expected Palm to report sales of $424.9 million when it releases its third-quarter earnings on March 18.

Wall Street did not respond well to the news, with the company's stock dropping $1.56, or 19.28 percent, to 6.53 by the closing bell on Thursday.

Palm recently expanded its Pre and Pixi smartphones beyond carrier Sprint to Verizon, with the exclusive Pre Plus and Pixi Plus. The company also has plans to release two devices based on the WebOS mobile operating system on wireless provider AT&T, the exclusive carrier of Apple's iPhone in the U.S.

Palm turned heads in 2009 when it unveiled WebOS with a surprise announcement, earning positive reaction and buzz from the press.

Rubinstein served as Apple's iPod chief until 2006, when he formally retired from the company. In 2007, he was courted by Palm to serve as its executive chairman, and he officially took the role of CEO last summer, coinciding with the launch of the Palm Pre.

Funny thing is, MDN called this from day one. Say what you will about crazy MDN, but they're usually right. Part of it comes naturally from backing the winning horse, and the rest . . . might just be uncommon prescience after all.

I had a Palm Pilot PDA in, I think, 1997 or so...man I thought it was the bee's knees! Sitting there with my stylus inputting contact names, phone numbers and addresses. Plus making 'to do' lists, ad nauseam under the false pretense that I was getting organized and therefore 'productive!'

It's sad to see a once proud company on the verge of tripping into their grave. I did Palm development for many years back in the day. When they abandoned PalmOS and left it hanging for basically years, they lost me and a lot of other developers. Those monkeys running the company back then took the money and ran.

I knew people at Palm asking me and other developers to return developing for them when the Pre has just been announced. Because of the way their shop treated the people that made them successful, I told them their platform was doomed and I refused to do anything for them. Thankfully, I'm still friends with those people and of no surprise, a few months after they tried to sway me to develop for them, those same Palm folks quit the company as they saw the writing on the wall.

Such a shame. The worst part is that the executives that ruined Palm are working elsewhere and certainly in my belief, fabricating stories that makes it sound like they had nothing to do with its demise.

Good riddance Palm. You'll go down in history as how BAD management can ruin a great company.

If I remember correctly, along time ago there was a story I read where the CEO/Founder of Palm walked around for months with solid piece of wood in his jacket pocket which was about the size/weight of the Palm Pilot PDA that was under development.

I told you so. Rubinstein is busy trying to be Steve Jobs that he forgot Palm is not Apple. Beside this is what you get for going head to head with everyone else instead of making partners. Furthermore, they should have spent more time improving their products instead of trying to crack iTunes. And who in their right mind release a phone the same month Apple release the iPhone?!